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Electricity Markets

Paper Session

Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PDT)

Manchester Grand Hyatt, Gaslamp C
Hosted By: Transportation and Public Utilities Group
  • Chair: Meredith Fowlie, University of California-Berkeley

Declining Power Plant Emissions, Co-benefits, and Regulatory Rebound

Meredith Fowlie
,
University of California-Berkeley
Edward Rubin
,
University of Oregon
Catherine Wright
,
University of California-Berkeley

Abstract

A growing literature has established a link between particulate matter exposure and adverse health outcomes. For practical reasons, this literature largely focuses on short-term outcomes—though many expect longer-term outcomes to matter greatly. In this paper, we apply a quasi-experimental approach to estimate the causal impact of power plant emissions on longer-run health outcomes. Our approach leverages two important developments that have unfolded over the past decade: (1) discrete and sustained reduction in coal plant emissions across the country and (2) spatially continuous, satellite-based estimates of pollution concentrations. We also explore the potential for strategic "rebound" effects following coal-plant closures.

The Private and External Costs of Germany's Nuclear Phase-Out

Stephen Jarvis
,
University of California-Berkeley
Olivier Deschenes
,
University of California-Santa Barbara
Akshaya Jha
,
Carnegie Mellon University

Abstract

Many countries have phased out nuclear electricity production in response to concerns about nuclear waste and the risk of nuclear accidents. This paper examines the impact of the shutdown of roughly half of the nuclear production capacity in Germany after the Fukushima accident in 2011. We use hourly data on power plant operations and a novel machine learning framework to estimate how plants would have operated differently if the phase-out had not occurred. We find that the lost nuclear electricity production due to the phase-out was replaced primarily by coal-fired production and net electricity imports. The social cost of this shift from nuclear to coal is approximately 12 billion dollars per year. Over 70\% of this cost comes from the increased mortality risk associated with exposure to the local air pollution emitted when burning fossil fuels. Even the largest estimates of the reduction in the costs associated with nuclear accident risk and waste disposal due to the phase-out are far smaller than 12 billion dollars.

Solar Impacts: Does Distributed Production Affect Consumption Choices?

Mark Jamison
,
University of Florida
Theodore J. Kury
,
University of Florida
Michelle A. Phillips
,
University of Florida

Abstract

As the role of electricity consumers changes with increased deployment of distributed generation, primarily through the installation of rooftop solar photovoltaic (PV) panels, the impact of this change on the electricity system as a whole - in the way that utilities deploy their own technologies, utility finance, and the environment – has implications for the future of electricity service. The analytical work to date on these alternatives assumes that electricity generation from these distributed sources displaces existing generation, usually from centralized sources – on a one to one basis. Utilizing a customer-specific data set, we specifically examine whether households change their consumption behavior after they install PV panels on their roofs. We find that consumers that install these panels increase their aggregate electricity consumption by 8-14%. This additional consumption has implications for the stability, the financial sustainability and the carbon footprint of our transforming electricity grid.

Dynamic Costs and Market Power: The Rooftop Solar Transition in Western Australia

Akshaya Jha
,
Carnegie Mellon University
Gordon Leslie
,
Monash University

Abstract

Policy arguments for solar panel subsidies are tied to their ability to displace production from polluting thermal (fossil-fuel-fired) generators. Because thermal generators must incur meaningful costs to ramp production, we show that solar/thermal substitution impacts are not confined to daylight hours. During the rapid rooftop solar growth in Western Australia (2015-2018), our estimates of the dynamic cost structure for the thermal fleet reveals that their total fuel expenditures fell 10%, but revenues increased 3%. Generators displaced by solar output face a cost barrier to start up and compete at sunset, increasing the ability for operating generators to exercise market power.
Discussant(s)
Akshaya Jha
,
Carnegie Mellon University
Grant McDermott
,
University of Oregon
Gordon Leslie
,
Monash University
Theodore J. Kury
,
University of Florida
JEL Classifications
  • L9 - Industry Studies: Transportation and Utilities
  • R0 - General